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If you’re looking for ways of getting credit score up, you’re at the right spot.
How long does it take to improve credit score?
Well, there’s good news! You can fix your credit score in a considerably short span of time.
A credit score of 700 and above is considered as a good one, on a range from 300 to 850. A good credit score is important in so many ways. For instance, if you’re applying for a loan, you have better chances of approval at lower interest rates, with a high credit score, because it proves your credibility.
First things first – Avail your credit scores either from Equifax or from TransUnion through Credit Karma. If you feel you need to boost it, read on for the top ways of improving a low credit score fast. Though your credit score is the result of your previous actions (read karma), you can still improve it with some nifty present actions.
The 5 major factors influencing your credit score are:
- Payment History
- Amounts Owed
- Length of Credit History
- New Credit
- Types of Credit Used
(Source: templatelab.com)
Here are the Top 6 Ways to Get Your Credit Score Up
#1. Credit Utilization – How to Increase Credit Score Quickly?
(Source: experian.com)
In basic terms, it is the ratio between the balance on your credit card and your allowed limits. For instance if the balance on your credit card is $450 and if the credit limit is $1500, then you have utilized 30% of the limit. The lower the utilization, the better it is for your credit score. It shows that you have used only very little of your credit loan.
Tip 1: Keep your credit utilization as low as possible, at least below 30%. People having the best credit scores use around 7% of credit available to them.
Tip 2: If for some reason, the card issuer reduces your limit, reduce the balance as well in order to improve credit score immediately.
Tip 3: See that all your cards are not maxed out.
Tip 4: If I want to fix my credit score, I’d try to extend my credit limit, so that the credit utilization is lowered.
#2. Paying Bills Immediately to Improve Credit Score
How do I get my credit score up? Payment history is a major factor affecting your credit score. If you make a late payment, it immediately results in your credit score falling. Every time you make a timely payment, it helps increase the score, but if you miss even a single payment, it could drastically negate all the good work done.
Tip: Even if you have unintentionally missed out on a due payment, use these tips to make payments as soon as you can. Most lenders will wait for a month before they report non-payments. This can help you in improving credit score in 30 days.
#3. Credit Age /Average Age
The age of your credit history is the time length of your credit usage. It shows how responsible you are while using credit cards and lenders view it because they can see your track record for borrowing. It is generally calculated based on the age of open accounts. They might even just view the oldest of your accounts for calculating the credit age.
Though the metric for calculating credit age can differ, the best idea would be to keep the oldest credit account open and alive. If you close an account, it will result in the credit history metrics falling.
In case the model makes use of an average across all your accounts, even if you open a new credit card, the average will come down. This way, it is even possible to increase credit score 100 points overnight and fix credit score.
Those with average age of around 8 years for their several open accounts get a higher credit score of around 675. Try to increase the average age.
Tip: Even if you haven’t been using your credit card for ages, you can bulk up the history by taking out personal loans; an auto loan or a mortgage, to improve credit score.
#4. Remove Credit Card Balance to Increase Credit Score
What is the fastest way to fix credit score? If you have small balances on several credit cards, try to eliminate such nuisance amounts. One model for calculating credit scores involves the number of cards that have balances.
Check out small balances in your credit cards and pay them up completely. Then take two cards and start using them, so that you don’t have balances on all your cards.
Tip: If you need to pay $100 for an item, pay the entire amount from one card, instead of $70 from one card and $30 from another. This creates balances in two cards instead of one and can negatively impact the credit score.
#5. Leaving Old Debts on the Report to Increase my Credit Score
You’ve just paid off that car loan and are immediately on the phone, trying to get the debt removed from your credit report. Don’t. If I leave it there, it could boost my credit score.
If it is a good debt and one that you have paid on time, it could work for you and not against you. If you let it remain on your report, it shows a good debt history and improves your score.
Anything that proves you have a solid repayment history should remain as long as possible. You got straight as; why on earth would you want to expunge it from your records? I wouldn’t, if I was trying to raise my credit score.
That said, check out any errors on your reports, as this could well cost you around 50 points. Get any errors wiped out from your history and you can see a positive change within a month.
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#6. Use your Card
If I want to build my credit score, I’d try to pay up using my credit card whenever possible. Don’t overuse, but use it in a responsible and steady way to improve credit score. Just take care to pay up bills in time and fully and don’t spend more than what you have.
Last Word
So, if you’re wondering how long it will take to improve your credit score, it all depends. Unfortunately, there’s no one size fits all. The credit score depends on multiple factors, so there’s no one magic wand that you can wave to leap up by a hundred points. It’s rather like losing weight, there is no quick fix.
We’d all feel terrific with a perfect 850 score, but even a 760 is considered a golden standard for credit. These are just some of the tips guaranteed to raise your credit score, though each one’s history is a unique one. Check out a few more sources for credit score help, like this one. So, let’s raise a toast, shall we?
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